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Can Snap's Top-Line Follow In Facebook's Footsteps?

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Can Snap's Top-Line Follow In Facebook's Footsteps?

Snap, Inc., the parent company of Snapchat, is in the very final stages of gearing up for its initial public offering.

Snap has a lot riding on its shoulders as its IPO will likely be compared to some of its social media peers. Moreover, the IPO comes at a time when Facebook Inc's (NASDAQ: FB) stock is trading near all-time highs while Twitter Inc's (NYSE: TWTR) stock isn't far removed from its lows of $13.73.

One of the most commonly used metrics in the social media space is average revenue per user (ARPU) and as Statista noted, Snap falls notably behind its peers. Specifically, Snap generated $1.05 in revenue on average from each global user versus Facebook's most recently reported $4.83 per user.

Related Link: Here's What The Pros Are Saying About Snap

Granted, Facebook has had years to fine tune its business, but prior to its IPO Facebook boasted an average revenue per user of $1.21.

Bottom line, Snap's business certainly has some way to go, especially after disclosing ongoing losses on growing revenue in 2016.

Here is a summary of the global average revenue per user in the two years leading up to both Facebook's and now Snap's IPO, courtesy of Statista:

 

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